APPLETON PAPERS: Settles Suit Over Pollution Caused by Ohio Mill----------------------------------------------------------------Appleton Papers, Inc. resolved claims by local residents in the purported class action filed in U.S. District Court for the Southern District of Ohio alleging that the company released and continues to release hazardous substances from a local paper mill, including PCBs, dioxins and fluorochemicals, which allegedly caused injury to them and/or damage to property.

In April 2005, 11 local residents who allegedly live, or have lived, near the wastewater treatment plant of the West Carrollton mill and two former mill employees -- and one of their spouses -- filed the lawsuits in Montgomery County, Ohio court.

Those suits were later removed to the U.S. District Court for the Southern District of Ohio. The local resident plaintiffs requested that the court certify the matter as a class action. The plaintiffs are seeking compensatory and punitive damages, remediation and other relief.

In 2005, the lawsuit commenced by the two former mill employees was dismissed without prejudice. The lawsuit commenced by the local resident plaintiffs has been resolved.

Appleton, Wisconsin-based Appleton Papers, Inc. -- http://www.appletonideas.com/-- manufactures and distributes a variety of specialty paper products. Its top product is carbonless paper (sold under the NCR Paper brand), which is used for business forms. Appleton also makes thermal paper and related products that are used in point-of-sale receipts and coupons, tickets (including event, lottery, and transportation tickets), and labels. Other units make security products (checks and documents designed to be resistant to counterfeiting) and plastic packaging films for use in the food processing, household goods, and industrial products industries.

ATLAS AIR: Faces Suits Over Cargo Services Price Manipulation-------------------------------------------------------------Atlas Air Worldwide Holdings, Inc., and its operating subsidiary, Polar Air Cargo, Inc. plus a number of other cargo carriers were named as co-defendants in several class actions filed either in U.S. federal courts or in a Canadian court.

The complaints generally allege, among other things, that the defendants, including AAWW and Polar, manipulated the market price for air cargo services sold domestically and abroad through the use of surcharges.

They seek treble damages and injunctive relief. All of the suits have been transferred or are awaiting transfer to the U.S. District Court for the Eastern District of New York, where the cases have been consolidated for pre-trial purposes.

The company has notified its directors and officers' insurance carrier of these lawsuits and has engaged outside counsel. Also, it has contacted counsel for the other named defendants with respect to conducting a joint defense in an effort to limit defense costs where possible.

Further, the company, Polar and a number of other cargo carriers have been named as defendants in a civil class action in Ontario, Canada that is substantially similar to the class actions in the U.S.

Purchase, New York-based Atlas Air Worldwide Holdings, Inc. (NASDAQ: AAWW) -- http://www.atlasair.com/-- is a holding company with two principal wholly owned operating subsidiaries Atlas Air, Inc. and Polar Air Cargo, Inc. The company provides air cargo and related services throughout the world, serving Asia, Australia, the Middle East, Africa, Europe, South America and the U.S. The company operates its business through four segments: Scheduled Service, Aircraft, Crew, Maintenance and Insurance, Air Mobility Command Charter for the U.S. military, and Commercial Charter. All segments are directly or indirectly engaged in the business of air cargo transportation. The company solely operates Boeing 747 freighter aircraft. AAWW's operating fleet totaled 41 aircraft at Dec. 31, 2005.

BROOKDALE SENIOR: Still Faces Del. Lawsuit Over Ventas Sale -----------------------------------------------------------Brookdale Senior Living, Inc. remains a defendant in a putative class action filed by certain limited partners in the Court of Chancery for the State of Delaware. The suit is "Edith Zimmerman et al. v. GFB-AS Investors, LLC and Brookdale Living Communities, Inc."

The suit was filed March 22, 2006. It alleges a claim for breach of fiduciary duty arising out of the sale of facilities indirectly owned by the investing partnerships to Ventas Realty, L.P., and the subsequent lease of those facilities by Ventas to subsidiaries of Brookdale Living.

The plaintiffs seek, among other relief, an accounting, damages in an unspecified amount, and disgorgement of unspecified amounts by which the defendants were allegedly unjustly enriched.

The company reported no material development in the case at its Aug. 14 form 10-Q filing with the U.S. Securities and Exchange Commission for the period ended June 30, 2006.

Chicago, Illinois-based Brookdale Senior Living Inc. (NYSE: BKD) -- http://www.brookdaleliving.com/-- is an operator of senior living facilities in the U.S., with over 380 facilities in 31 states and the ability to serve over 30,000 residents.

CAYRE GROUP: Recalls Hooded Sweatshirts for Strangulation Hazard----------------------------------------------------------------The Cayre Group, of New York, New York, in cooperation with the U.S. Consumer Product Safety Commission, is recalling about 4,500 units of "Candie's" brand children's hoodie sweatshirts with drawstrings.

The company said these sweatshirts have a drawstring through the hood, posing a strangulation hazard to children. In February 1996, CPSC issued guidelines to help prevent children from strangling or getting entangled on the neck and waist by drawstrings in upper garments, such as jackets and sweatshirts. No incidents or injuries have been reported.

The recalled hoodie style zip front hooded sweatshirts were sold in four youth sizes S (7-8), M (9-12), L (14) and XL (16). The sweatshirts have drawstrings through the hood and were available in two colors, Blue Bell and Demitasse. A tag sewn on the inside of the garment reads, "Candie's."

These recalled hoodies were manufactured in the Philippines and are being sold at Kohl's department stores and on Kohls.com from August 2006 through September 2006 for between $20 and $36.

Consumers are advised to immediately remove the drawstrings from the sweatshirts to eliminate the hazard, or contact The Cayre Group to return the merchandise for a full refund.

For additional information, contact The Cayre Group at (800) 284-3023 between 9 a.m. and 5 p.m. ET Monday through Friday, or visit http://www.cayre.com.

CSA NUTRACEUTICALS: Reaches $10.8M Settlement in Shape Up! Suit---------------------------------------------------------------TV personality Phil "Dr. Phil" McGraw agreed to put up a settlement fluid recovery fund to resolve the Shape Up! suit currently pending against him and CSA Nutraceuticals, GP, LLC in Superior Court of the State of California for the County of Los Angeles (Case No. BC 312830).

The fund will consist of $6.3 million of Nutrilite(R) Daily Multivitamin/Multimineral, 6-month supply, and $4.5 million in cash, out of which all costs and attorneys fees will be paid.

All of the contents of the Fund will be distributed. Dr. Phil will have no personal obligation to contribute to the Fund.

The agreement provides benefits to people who can establish, by affidavit or proof of purchase, that they bought Shape Up! supplements before July 1, 2006.

The agreement will also provide benefits to certain charitable organizations. These charities are to be selected by the parties and approved by the court.

The plaintiffs filed the suit against Dr. Phil and Texas-based CSA Nutraceuticals in March 2004 and sought recognition of their litigation as a national class action complaint.

The plaintiffs, including Joanne Levine of California, alleged that the defendants made material misrepresentations and false claims based on certain marketing, promotional and advertising materials concerning Shape Up! products.

Lawyers for the plaintiffs maintained the claims were not supported by science.

The Shape Up! products, which are no longer distributed or sold, include the Shape Up! Apple, Pear, and Intensifier supplements and the Shape Up! meal replacement products, including bars, shakes, and ready-to-drink mixes.

According to plaintiffs' attorney Henry H. Rossbacher, most of the products were sold over the counter at Wal-Mart and other retailers.

The defendants' position is that the Shape Up! products were accurately described, that defendants acted properly, and that Dr. Phil did not receive any money from the sale of the products as his endorsement fee was paid directly to charity.

The court did not reach any decision regarding the case.

Under the settlement, McGraw and the other defendants admit no fault, misrepresentation or wrongdoing.

DIOCESE OF COVINGTON: Judge McGinnis to Handle Sexual Abuse Suit----------------------------------------------------------------Kentucky's Chief Justice Joseph Lambert has appointed Pendleton County judge Robert W. McGinnis to replace Senior Judge John Potter in the sexual abuse case against the Diocese of Covington, The Kentucky Post reports. Judge McGinnis will preside over a hearing in Boone Circuit Court on Oct. 4.

Senior Judge John Potter announced his retirement after a session on Sept. 13 (Class Action Reporter, Sept. 19, 2006. The hearing was set to deal with attorneys' fees and a demand by attorney Brenda Dahlenburg Bonar to get part of an $84 million settlement.

Judge Potter awarded plaintiff attorneys $18.5 million in fees in May, but Stan Chesley, lawyer for the lead plaintiff, had refused to give Ms. Bonar a share. Ms. Bonar argues that she is entitled part of the fees for her efforts in the initiation, prosecution and ultimate settlement of the case. The initial two plaintiffs in the case that eventually became a class action were her clients, as well as 13 of the original class members.

Appeal on Disclosure of Victims' Info

Attorneys for the plaintiff filed an appeal on Sept. 8 against a court ruling ordering the release of personal information about the victims (Class Action Reporter, April 12, 2006).

Attorneys had argued that the order violates the victims' constitutional right to privacy. According to the appeal, Judge Potter himself stated in an order of June 2005 that the information victims submitted in the settlement process wouldn't be made public without their consent.

In that order, Judge Potter pointed out that under Kentucky law sex-abuse allegations must be forwarded to police. The judge reasoned that he wants the prosecutors to know the type of abuse, when it occurred and the name of the suspected abuser.

Attorneys for the plaintiff, however, reasoned that those laws are designed to protect children suffering abuse right now, and not adults who endured it years ago.

In a petition filed with the Kentucky Court of Appeals, the attorneys say that Judge Potter's order has already harmed their clients by giving them anxiety over, among others, the embarrassment that the disclosure could bring.

Settlement

Meanwhile, the first monetary awards had been distributed to victims of sexual abuse in the class action settlement (Class Action Reporter, Sept. 15, 2006). The amounts awarded from the $85 million settlement weren't revealed due to privacy concerns, said Mr. Chesley.

The settlement got initial court approval in July 2005. On Jan. 31, Judge Potter finally approved the settlement, which will benefit 361 victims. It calls for victims to receive between $5,000 and $1 million based on the severity and duration of the abuse they suffered.

Case Background

Mr. Chesley filed the class action in Boone County Circuit Court back in 2003, claiming 21 priests and some other workers abused more than 150 victims in the Diocese of Covington for decades while church officials did nothing to stop the misconduct (Class Action Reporter, Feb. 18, 2003).

According to court filings, from about 1956, information on the sexual abuse of minors by diocesan priests has been concealed from the public, including parents of children in schools and parishes where the alleged perpetrators were assigned, as well as from family members of employees of the diocese.

DYNEGY INC: Discovery Continues in W.Va. Stand Energy Litigation----------------------------------------------------------------Discovery is still ongoing in a purported class action filed against Dynegy, Inc. as well as other companies that is pending in U.S. District Court for the Southern District of West Virginia.

In October 2004, the company was named as a defendant in the case, which is alleging that interstate pipelines provided preferential storage and transportation services to their own unregulated marketing affiliate in return for a percentage of the profits.

Plaintiffs contend that such conduct violates applicable Federal Regulation and Oversight of Energy regulations and federal and state antitrust laws, and constitutes common law tortious interference with contractual and business relations.

In addition, the complaint claims the defendants conspired with the other market participants to receive preferential natural gas storage and transportation services at off-tariff prices. The complaint seeks unspecified compensatory and punitive damages.

Following numerous procedural motions, which limited plaintiffs' claims against the company to state antitrust violations and resulting unjust enrichment, defendants filed their answers to plaintiffs' Second Amended Complaint in September 2005. The parties are actively engaged in discovery, according to the company's Aug. 14 form 10-Q filing with the U.S. Securities and Exchange Commission for the period ended June 30, 2006.

The suit is "Stand Energy Corp., et al. v. Columbia Gas Transmission Corp., et al., 2:04-cv-00867," filed in the U.S. District Court for the Southern District of Wets Virginia under Judge Robert C. Chambers.

DYNEGY INC: Plaintiffs Appeal Dismissal of Tex. ERISA Fraud Suit----------------------------------------------------------------Plaintiffs are appealing the dismissal of the original class action against Dynegy, Inc. and several individual defendants that was filed in the U.S. District Court for the Southern District of Texas alleging violations of the Employee Retirement Income Security Act.

The suit was filed in September 2005 by two former Illinois Power Co. salaried employees who were participants in the Dynegy Midwest Generation, Inc. (DMG) 401(k) Savings Plan for salaried employees (formerly known as the Illinois Power Incentive Savings Plan), which the company refers to as the "DMG Salaried Plan. The plaintiffs purport to represent all DMG Salaried Plan participants who held Dynegy common stock through the DMG Salaried Plan from Jan. 1, 2002 through Jan. 30, 2003.

The complaint alleges violations of ERISA in connection with the DMG Salaried Plan. It seeks unspecified damages for the losses to the plan, as well as attorney's fees and other costs.

In December 2005, Dynegy filed a motion to dismiss the complaint, in response to which plaintiffs' counsel filed a second putative class action on behalf of three alleged plan participants that is materially identical to the original action.

In March 2006, the court dismissed the original action with prejudice based on lack of standing and lack of subject matter jurisdiction, and the plaintiffs in that matter have appealed that dismissal.

The second putative class action relating to the DMG Salaried Plan remains pending. It is still at the class discovery stage.

The suit is "Holtzscher, et al. v. Dynegy Inc., et al., Case No. 4:05-cv-03293," filed in the U.S. District Court for the Southern District of Texas under Judge Sim Lake.

DYNEGY INC: Some Claims Remain in Ill. ERISA Violations Lawsuit---------------------------------------------------------------Several claims are still pending against Dynegy, Inc., Illinois Power Co., Dynegy Midwest Generation, Inc. and several others in a purported class action filed in the U.S. District Court for the Southern District of Illinois alleging violations of the Employee Retirement Income Security Act.

The suit was filed in January 2005 by three DMG union employees who are participants in the DMG 401(k) Savings Plan for Employees Covered Under a Collective Bargaining Agreement (formerly known as the Illinois Power Co. Incentive Savings Plan For Employees Covered Under a Collective Bargaining Agreement), which the company refers to as the "DMG 401(k) Plan."

The plaintiffs purport to represent all DMG and Illinois Power employees who held Dynegy common stock through the DMG 401(k) Plan from February 2000 to the present.

The complaint alleges violations of ERISA in connection with the DMG 401(k) Plan that are similar to the claims made in the Dynegy Inc. ERISA litigation settled by Dynegy in December 2004, including claims that certain of Dynegy's former officers -- who are past members of its Benefit Plans Committee -- breached their fiduciary duties to plan participants and beneficiaries in connection with the plan's investment in Dynegy common stock-in particular with respect to Dynegy's financial statements, Project Alpha, alleged round trip trades and gas price index reporting.

The lawsuit seeks unspecified damages for the losses to the plan, as well as attorney's fees and other costs.

In March 2006, an amended complaint was filed naming additional former officers and employees of Dynegy as defendants and amending the fraud claims.

In June 2006, the court granted Dynegy's motion to dismiss plaintiffs' fraud claims for failing to plead those claims with particularity. The remaining counts in the March 2006 amended complaint remain pending.

The suit is "Lively, et al. v. Dynegy, Inc., et al., Case No. 3:05-cv-00063-MJR-CJP," filed in the U.S. District Court for the Southern District of Illinois under Judge Michael J. Reagan with referral to Judge Clifford J. Proud.

EL POLLO: Cal. Managers' Suit Remains Stayed Pending Arbitration----------------------------------------------------------------The Superior Court of the State of California, County of Los Angeles has yet to lift the stay on the proceedings in a purported class action against El Pollo Loco, Inc., a wholly owned subsidiary of EPL Intermediate, Inc.

The suit alleges certain violations of California labor laws, including alleged improper classification of general managers and restaurant managers as exempt employees, pending the outcome of the mandatory arbitration between the company and one of the plaintiffs.

On or about Apr. 16, 2004, two former employees and one current employee filed the class action against the company on behalf of all putative class members, who are former and current general managers and restaurant managers from April 2000 to present.

The complaint was served on the company on Apr. 19, 2004. The court ordered the class action stayed pending the arbitration of one of the named putative class plaintiffs as a result of his execution of a mandatory arbitration agreement with the company.

Irvine, California-based El Pollo Loco, Inc. -- http://www.elpolloloco.com-- is a restaurant concept specializing in flame-grilled chicken. It operates a restaurant system consisting of 146 company-operated and 194 franchised restaurants located primarily in California, with additional restaurants in Arizona, Nevada, Texas and Illinois.

EL POLLO: Still Faces Overtime Wage Violations Suit in Calif. -------------------------------------------------------------El Pollo Loco, Inc., a wholly owned subsidiary of EPL Intermediate, Inc., remains a defendant in a purported class action filed in the Superior Court of the State of California, County of Los Angeles, alleging certain violations of California labor laws and the California Business and Professions Code.

Plaintiff Salvador Amezcua filed the suit on Oct. 18, 2005, on behalf of himself and all others similarly situated, based on, among other things, failure to pay overtime compensation, unlawful deductions from earnings and unfair competition.

The suit requested remedies that include compensatory damages, injunctive relief, disgorgement of profits and reasonable attorneys' fees and costs.

The company was served with this complaint on Dec. 16, 2005. The court has ordered that the case be deemed complex and assigned it to the complex litigation panel.

Irvine, California-based El Pollo Loco, Inc. -- http://www.elpolloloco.com-- is a restaurant concept specializing in flame-grilled chicken. It operates a restaurant system consisting of 146 company-operated and 194 franchised restaurants located primarily in California, with additional restaurants in Arizona, Nevada, Texas and Illinois.

ENRON CORP: UC Approves $13.5M Settlement with Kirkland & Ellis ---------------------------------------------------------------The University of California Board of Regents approved a $13.5 million settlement with the law firm of Kirkland & Ellis LLP in the Enron Corp. securities litigation on Sep. 21. The settlement is subject to approval by the court. The university is lead plaintiff representing a class of Enron investors who lost tens of billions of dollars in the company's bankruptcy.

Kirkland & Ellis served as legal counsel for a number of the off-books entities through which Enron was able to manipulate its financial statements. The court dismissed all of the claims against Kirkland & Ellis by order dated Dec. 19, 2002, but that order remained subject to appeal.

With this latest settlement, the university has now obtained more than $7.3 billion (including interest) for Enron investors, including:

-- $2.4 billion from Canadian Imperial Bank of Commerce, -- $2.2 billion from JPMorganChase, -- $2 billion from Citigroup, -- $222.5 million from Lehman Brothers, -- $69 million from Bank of America, -- $168 million from Enron's outside directors, and -- $32 million from Andersen Worldwide

The university will also secure a distribution of $37 million for investors through the bankruptcy proceeding for the LJM2 partnership involved in the Enron scheme.

Remaining defendants in the investors' lawsuit include former officers of Enron, the law firm of Vinson & Elkins and a number of major financial institutions that allegedly set up false investments in clandestinely controlled Enron partnerships, used offshore companies to disguise loans and facilitated phony sales of phantom Enron assets. As a result, Enron executives were allegedly able to deceive investors by reporting increased cash flow from operations and by moving billions of dollars of debt off Enron's balance sheet, thereby artificially inflating securities prices.

In February 2002, the university was named lead plaintiff in the Enron shareholders' class action previously filed against top executives of Enron Corp. and its accounting firm, Arthur Andersen LLP. The university filed a consolidated complaint on April 8, 2002, adding nine banks and two law firms as defendants in the case. In April 2003, U.S. District Court Judge Melinda Harmon completed her rulings on the various defendants' motions to dismiss and lifted the stay on discovery. Following those rulings, the university filed an amended complaint on May 14, 2003.

Other institutional investors acting as representative plaintiffs on behalf of Enron investors include:

On April 8, 2002, Lerach Coughlin Stoia Geller Rudman & Robbins, LLP attorneys filed a consolidated class action against Enron Corp. in the U.S. District Court in Houston. The suit seeks relief for purchasers of Enron publicly traded equity and debt securities between Oct. 19, 1998 and Nov. 27, 2001.

The consolidated complaint charges certain Enron executives and directors, its accountants, law firms, and banks with violations of the federal securities laws and alleges that defendants engaged in massive insider trading while making false and misleading statements about Enron's financial performance.

Shareholders in the company lost billions after Enron revealed in late 2001 it would incur losses of at least $1 billion and would restate its financial results for 1997, 1998, 1999, 2000, and the first two quarters of 2001, to correct errors that inflated Enron's net income by $591 million.

On Dec. 2, 2001, Enron filed for Chapter 11 bankruptcy.

Non-settling Defendants

The non-settling defendants include Merrill Lynch & Co., Barclays PLC, Toronto-Dominion Bank, Royal Bank of Canada, Deutsche Bank AG and the Royal Bank of Scotland Group PLC.

The suit against Enron is "In Re: Enron Corp Securities, et al. (4:02-md-01446)" filed in the U.S. District Court for the Southern District of Texas under Judge Melinda Harmon. Representing the defendants is J Mark Brewer of Brewer and Pritchard, Three Riverway Ste 1800, Houston, TX 77056, Phone: 713-209-2950, Fax: 713-659-5302; E-mail: brewer@bplaw.com.

ENRON CORP: UC Approves $72.5M Settlement with Arthur Andersen --------------------------------------------------------------The University of California Board of Regents approved a $72.5 million settlement with the accounting firm of Arthur Andersen LLP in the Enron Corp. securities litigation on Sept. 21.

The settlement is subject to approval by the court. The Andersen settlement becomes effective only if the University settles with certain other defendants prior to the end of trial. The university is lead plaintiff representing a class of Enron investors who lost tens of billions of dollars.

The Andersen accounting firm was Enron's auditor, and signed off on many of the company's allegedly false and misleading financial reports.

With this latest settlement, the university has now obtained more than $7.3 billion (including interest) for Enron investors, including:

-- $2.4 billion from Canadian Imperial Bank of Commerce, -- $2.2 billion from JPMorganChase, -- $2 billion from Citigroup, -- $222.5 million from Lehman Brothers, -- $69 million from Bank of America, -- $168 million from Enron's outside directors, and -- $32 million from Andersen Worldwide

University of California will also secure a distribution of $37 million for investors through the bankruptcy proceeding for the LJM2 partnership involved in the Enron scheme.

Remaining defendants in the investors' lawsuit include former officers of Enron, the law firm of Vinson & Elkins and a number of major financial institutions that allegedly set up false investments in clandestinely controlled Enron partnerships, used offshore companies to disguise loans and facilitated phony sales of phantom Enron assets.

As a result, Enron executives were allegedly able to deceive investors by reporting increased cash flow from operations and by moving billions of dollars of debt off Enron's balance sheet, thereby artificially inflating securities prices.

In February 2002, University of California was named lead plaintiff in the Enron shareholders' class action previously filed against top executives of Enron Corp. and its accounting firm, Arthur Andersen LLP. The university filed a consolidated complaint on April 8, 2002, adding nine banks and two law firms as defendants in the case. In April 2003, U.S. District Court Judge Melinda Harmon completed her rulings on the various defendants' motions to dismiss and lifted the stay on discovery. Following those rulings, the university filed an amended complaint on May 14, 2003.

Other institutional investors acting as representative plaintiffs on behalf of Enron investors include:

On April 8, 2002, Lerach Coughlin Stoia Geller Rudman & Robbins, LLP attorneys filed a consolidated class action against Enron Corp. in the U.S. District Court in Houston. The suit seeks relief for purchasers of Enron publicly traded equity and debt securities between Oct. 19, 1998 and Nov. 27, 2001.

The consolidated complaint charges certain Enron executives and directors, its accountants, law firms, and banks with violations of the federal securities laws and alleges that defendants engaged in massive insider trading while making false and misleading statements about Enron's financial performance.

Shareholders in the company lost billions after Enron revealed in late 2001 it would incur losses of at least $1 billion and would restate its financial results for 1997, 1998, 1999, 2000, and the first two quarters of 2001, to correct errors that inflated Enron's net income by $591 million.

On Dec. 2, 2001, Enron filed for Chapter 11 bankruptcy.

Non-settling Defendants

The non-settling defendants include Merrill Lynch & Co., Barclays PLC, Toronto-Dominion Bank, Royal Bank of Canada, Deutsche Bank AG and the Royal Bank of Scotland Group PLC.

The suit against Enron is "In Re: Enron Corp Securities, et al. (4:02-md-01446)" filed in the U.S. District Court for the Southern District of Texas under Judge Melinda Harmon. Representing the defendants is J Mark Brewer of Brewer and Pritchard, Three Riverway Ste 1800, Houston, TX 77056, Phone: 713-209-2950, Fax: 713-659-5302; E-mail: brewer@bplaw.com.

FIELDSTONE MORTGAGE: Discovery Commences in Ill. FCRA Lawsuit------------------------------------------------------------- Discovery continues in the class action against Fieldstone Mortgage Co., which is pending in the U.S. District Court for the Northern District of Illinois.

Plaintiff claims that the company violated the firm offer of credit guidelines encapsulated in 15 U.S.C. Section 1681 et seq. during its mail marketing campaign in or around April 2005.

Specifically, plaintiff alleges that the company did not comply with the statutory guidelines in providing a firm offer of credit to the potential consumer. Pursuant to 15 U.S.C. Section 1681 et seq., statutory damages can range from $100 to $1,000 per mailing in the event that the violation is deemed willful.

No motion for class certification has yet been filed in this case. The company filed a motion to dismiss/motion to strike pursuant to Federal Rule 12(b)(6) for the injunctive relief portion of the compliant. This action is in the initial stage of discovery, according to the company's Aug. 14, 2006 10-Q filing with the U.S. Securities and Exchange Commission for the period ended June 30, 2006.

The suit is "Rhodes v. Fieldstone Mortgage Co., Case No. 1:06-cv-00108," filed in the U.S. District Court for the Northern District of Illinois under Judge Mark Filip.

FIELDSTONE MORTGAGE: Md. Court Hears Oral Arguments in "Hill"-------------------------------------------------------------The Circuit Court for Baltimore City, Maryland heard oral arguments from both sides on the outstanding issues in the purported class action, "Hill, et al. v. Fieldstone Mortgage Co., et al.," according to the company's Aug. 14, 2006 10-Q filing with the U.S. Securities and Exchange Commission for the period ended June 30, 2006.

The class action was filed on Jan. 16, 2002 by plaintiffs, who are two individuals who obtained a second mortgage loan from Fieldstone Mortgage in 1998, in the amount of $28,000, secured by their residence. It was brought against Fieldstone Mortgage and 10 other mortgage lenders that plaintiffs contend are or were the assignees of second mortgage loans in Maryland made by Fieldstone Mortgage.

The lawsuit alleges, among other things, that:

-- the defendants violated the Maryland Second Mortgage Loan Law, or SMLL, by failing to obtain the necessary license to provide a second mortgage loan and by charging fees unauthorized by the SMLL; and

-- the defendants violated the Maryland Consumer Protection Act by engaging in conduct contrary to the provisions of the SMLL.

The suit seeks a declaratory judgment that their mortgage contract is illegal and, therefore, that they do not need to honor their obligation to repay the second mortgage loan.

Plaintiffs also seek monetary damages in the amount of $300,000. Fieldstone Mortgage, and each of the other defendants, filed motions to dismiss asserting that, among other things:

-- the plaintiffs' claims are barred by the applicable three-year statute of limitations;

-- the plaintiffs' failed to properly plead a claim under the Maryland Consumer Protection Act; and

-- the plaintiffs' request for a judicial declaration that their mortgage contract is illegal is not a remedy available under either Maryland statutory or common law.

The circuit court heard oral arguments on the motions to dismiss in January 2003. To date, the court has not ruled on this motion.

The lawsuit was consolidated with 14 other class actions with identical claims against other mortgage lenders. No motion for class certification has yet been filed in this case.

On March 30, 2006, the court held a status conference with regard to this matter. The court requested supplemental briefings on the outstanding issues from the parties. Oral argument on the outstanding issues was heard on July 26, 2006.

Columbia, Maryland-based Fieldstone Investment Corp. (NASDAQ: FICC) -- http://www.fieldstonemortgage.com/-- is a mortgage real estate investment trust engaged in originating loans through its operating subsidiary, Fieldstone Mortgage Co. The company originates loans through its two primary channels, non-conforming and conforming. Each channel has wholesale and retail lending divisions. It maintains a wholesale network of over 4,700 independent mortgage brokers, of which approximately 4,300 are non-conforming brokers and 400 are conforming brokers serviced by 20 regional operations centers. In addition, the company operates a network of non-conforming retail branch offices and conforming retail branch offices located in 21 states throughout the U.S.

HEXION SPECIALTY: Faces Suit Over Air Emissions, Odors in Ky.-------------------------------------------------------------Hexion Specialty Chemicals, Inc. is a defendant in a purported class action filed in the U.S. District Court for the Western District of Kentucky.

The suit, filed on May 2006, relate to odors and air emissions from the company's Louisville plant. It was filed as a class action on behalf of plaintiffs living in Riverside Gardens, a community adjacent to the plant.

The suit is "Humphrey et al. v. Hexion Specialty Chemicals, Inc., Case No. 3:06-cv-00276-JGH," filed in the U.S. District Court for the Western District of Kentucky under Judge John G. Heyburn, II.

HOLLAND AMERICA: Passenger Sues in Wash. Over Alleged Fraud-----------------------------------------------------------Seattle-based cruise-ship operator Holland America Line, a wholly owned subsidiary of Carnival Corp., is facing a lawsuit in the U.S. District Court for the Western District of Washington over alleged defrauding of passengers traveling on Alaska cruises through a series of deceptive actions.

Plaintiff J.B. Miller, an Ohio resident who took an Alaska cruise on July 15, 2006, claims injuries by the company's alleged illegal omissions of the nature of the financial relationships underlying the shore excursions it offers. The central focus of the complaint is that the company did not disclose, either orally or in writing, that the third-party businesses that the company features and promotes, which conduct shore excursions for Holland America passengers in Alaska, have paid the company to be included in promotions.

In addition, Holland America allegedly failed to follow Alaska law with respect to disclosure of its kickbacks on shore excursions, it has also stolen from its passengers in the guise of "collecting" fines that the government has never imposed.

In July 2006, Ohio resident J.B. Miller's flight to Seattle was delayed, causing him and his family to miss the sailing of a Holland America cruise to Alaska.

According to the complaint, Mr. Miller and his family were instructed to fly to Juneau, Alaska, in order to meet the ship. Once aboard, Holland America charged the Millers $300 per person for what it characterized as a "Jones Act Penalty."

According to Mr. Berman, while the government does have the ability to fine passengers under a similar act, the Passenger Vessels Service Act, the government never imposed the fine on Holland America.

"Holland America forced the family to come up with $1,200 under the guise of a federal fine, and we know that Holland America knew the government would never ask for the money in return, and the government did not do so here," Mr. Berman noted. "In our view this is an egregious fraud and we believe this may be a wide-spread practice, involving a large percentage of those fined."

The named plaintiff filed the action on behalf of:

-- a class of "Shore Excursion Kickback Class" consisting of all persons and entities who took Alaska cruises or "cruisetours" with Holland America who also purchased shore excursions or other services offered on promotional material distributed by Holland America or on promotions by the company; and

-- and a class of "Jones Act Phony Penalty Class" consisting of all persons and entities who took Holland America cruises or "cruisetours" within six years of the date of this lawsuit, who were assessed purported "Jones Act Penalties" by Holland America when the U.S. government did not actually assess any such penalties.

The plaintiff is requesting:

* an order certifying the action to be maintained as a class action under the Federal Rules of Civil Procedure and appointing Mr. Miller and his counsel to represent the class;

* statutory damages suffered by class members in the amount of $500 per shore excursion taken per class member and $500 per phony JOnes Act or PVSA charge;

* contract damages of $300 for each class member improperly charged for a JOnes Act or PVSA penalty when no such penalty was ever actually imposed;

* a temporary, preliminary and/or permanent order providing for equitable and injunctive relief enjoining Holland America from omitting to disclose that the third-party businesses they promote for shore excursions pay Holland America money for that privilege; and

INFOSONICS CORP: Faces Multiple Securities Fraud Suits in Calif.----------------------------------------------------------------InfoSonics Corp. is defendant in several purported securities fraud class actions filed in the U.S. District Court for the Southern District of California.

Between June 13, 2006 and July 14, 2006, seven securities class actions were filed against the company and certain of its officers and directors. The longest class period alleged in these seven cases is from May 8, 2006 to June 12, 2006.

Each of these substantially similar lawsuits allege that the defendants violated Sections 10(b), 20(a) and/or 20A of the U.S. Exchange Act, as well as the associated Rule 10b-5, in connection with the company's restatement announced on June 12, 2006.

In these seven lawsuits, plaintiffs seek declarations that each action is a proper class action, unspecified damages, interest, attorneys' fees and other costs, equitable/injunctive relief, and/or such other relief as is just and proper.

The first identified complaint is "Peter Polizzi, et al. v. InfoSonics Corp., et al., Case No. 06-CV-01233," filed in the U.S. District Court for the Southern District of California.

INTELSAT LTD: Conn. Court Mulls Judgment Motion for ERISA Suit--------------------------------------------------------------The U.S. District Court for the District of Columbia has yet to rule on a motion for partial summary judgment in the class action against Intelsat, Ltd., which alleges violations of the Employee Retirement Income Security Act of 1974.

Initially, two putative class action complaints that were filed against the company and Intelsat Global Service Corp. in 2004 were consolidated into a single case. The suit was brought by certain named plaintiffs who are U.S. retirees, spouses of retirees or surviving spouses of deceased retirees.

The complaint, which was amended several times, arose out of a resolution adopted by the governing body of the International Telecommunications Satellite Organization, referred to as the IGO, prior to privatization regarding medical benefits for retirees and their dependents.

The plaintiffs allege that Intelsat wrongfully modified health plan terms to deny coverage to surviving spouses and dependents of deceased Intelsat retirees, thereby breaching the fiduciary duty obligations of ERISA, and the "contract" represented by the IGO resolution.

In addition, the plaintiffs allege fraudulent misrepresentation and promissory estoppel. They seek a declaratory ruling that putative class members would be entitled to unchanged health plan benefits in perpetuity, injunctive relief prohibiting any changes to these benefits, a judgment in the amount of $112.5 million, compensatory and punitive damages in the amount of $1 billion, and attorneys' fees and costs.

The court has granted the company's motion to dismiss most of the fraud claims, although in subsequent amendments plaintiffs have restated them. The court authorized very limited discovery, which is underway, and the company filed a motion for summary judgment on Jan. 31, 2006.

The plaintiffs' response was filed on Feb. 27, 2006, and the company's reply was filed on March 21, 2006. The plaintiffs also filed a motion for partial summary judgment on March 23, 2006, seeking a ruling that the company may not rely as a defense upon the immunity of its predecessor IGO, and the company filed its opposition to the motion for partial summary judgment on April 11, 2006. The plaintiffs filed their reply to Intelsat's opposition on April 24, 2006.

The suit is "Morales, et al. v. Intelsat Global Service Corp., et al., Case No. 1:04-cv-01044-JR," filed in the U.S. District Court for the District of Columbia under Judge James Robertson.

The company said the plastic wheels on the truck can detach, exposing a metal axle. This poses a puncture hazard to young children.

LEGO Systems, Inc. has received 10 reports of a wheel detaching. Two children received serious puncture injuries resulting from the exposed metal axle once the wheel detached. Another child fell when the wheel came off of the toy truck.

LEGO EXPLORE Super Truck is a toy-in-toy product designed for children ages 18 months and up. The toy features a red plastic pick-up/dump truck that measures about 15-inches high and 19-inches wide with four 7-inch black plastic wheels that are packed with a box of 40 LEGO DUPLO bricks in the cargo area. The unit has a row of DUPLO "studs" across the top of the cab, molded yellow headlights and stickers on the front and sides of the unit create the idea of a windshield, windows and doors depicting a LEGO figure in the driver's seat. The LEGO Explore logo is printed on the door stickers. The box of DUPLO bricks is not included in this recall.

MURPHY OIL: Settles Hurricane Katrina Oil Spill Suit for $330M--------------------------------------------------------------Murphy Oil USA, Inc., a wholly owned subsidiary of Murphy Oil Corp., entered into a Memorandum of Understanding with the Plaintiffs' Steering Committee to settle a consolidated class action litigation pending in the U.S. District Court for the Eastern District of Louisiana.

The parties' settlement proposal, negotiated less than a year after the filed cases were consolidated, would conclude thousands of claims, with total expenditures and settlement benefits to be paid by Murphy Oil and its insurers estimated at $330,000,000.

Under the terms of the Memorandum, all residential and commercial properties in the Class Area will receive a cash payment pursuant to a fair and equitable allocation subject to court approval following recommendations by a court-appointed Special Master. The company believes these payments will be covered by insurance.

The entire Class Area will have the benefit of a comprehensive remediation program as approved by the court and regulatory bodies and to be overseen by regulatory authorities.

Additionally, the company has agreed to make bona fide offers to purchase, at fair market value, all residential and business properties located on the first four streets west of the refinery and north of St. Bernard Highway up to the Twenty Arpent Canal.

The proposed settlement is subject to approval of the U.S. District Court for the Eastern District of Louisiana, which has scheduled a hearing for the matter on Oct. 10, 2006.

On Sept. 9, 2005, a class action was filed seeking unspecified damages to a class comprised of residents of St. Bernard Parish who were claiming damages caused by a release of crude oil at the company's wholly-owned subsidiary, Murphy Oil USA's Meraux, Louisiana, refinery as a result of flooding damage to a crude oil storage tank following Hurricane Katrina.

The suit was filed by property owner Patrick Joseph Turner on behalf of at least 500 property owners in St. Bernard Parish.

Additional class actions have been consolidated with the first suit into a single action in the U.S. District Court for the Eastern District of Louisiana.

The court certified the class on Jan. 30, 2006.

The suit is "Turner v. Murphy Oil USA, Inc., Case No. 2:05-cv-04206-EEF-JCW," filed in the U.S. District Court for the Eastern District of Louisiana under Judge Eldon E. Fallon with referral to Judge Joseph C. Wilkinson, Jr.

There are 29 plaintiffs remaining in this case as well as 24 plaintiffs in the previously disclosed case of "Michael Adwell, et al. vs. PSF, et al." also pending in Jackson County, Kansas City, Missouri.

The plaintiffs alleged odors from the company's large-scale hog operations had spoiled their enjoyment of their property.

In the company's most recent annual report, filed in June with the U.S. Securities and Exchange Commission, Premium Standard said the same lawyer involved in these two court cases had filed five other class actions, all making similar allegations about odor.

RAM ENERGY: Continues to Face Royalty Owners' Suit in Okla.-----------------------------------------------------------RAM Energy Resources, Inc., along with other defendants, denied the allegations in a purported class action filed by royalty owners in the District Court for Woods County, Oklahoma.

In April 2002, a lawsuit was filed against RAM Energy, Inc., certain of its subsidiaries and various other individuals and unrelated companies, by a lessor of certain oil and gas leases from which production was sold to a gathering system owned and operated by Magic Circle Energy Corp. or its wholly-owned subsidiary, Carmen Field Limited Partnership. The lawsuit covers the period from 1977 to a current date.

In 1998, both Magic Circle and CFLP became wholly owned subsidiaries of RAM Energy, Inc. The lawsuit was filed as a class action on behalf of all royalty owners under leases owned by any of the defendants during the period Magic Circle or CFLP owned and operated the gathering system.

The petition claims that additional royalties are due because Magic Circle and CFLP resold oil and gas purchased at the wellhead for an amount in excess of the price upon which royalty payments were based and paid no royalties on natural gas liquids extracted from the gas at plants downstream of the system.

Other allegations include under-measurement of oil and gas at the wellhead by Magic Circle and CFLP, failure to pay royalties on take or pay settlement proceeds and failure to properly report deductions for post-production costs in accordance with Oklahoma's check stub law.

RAM Energy, Inc. and other defendants have filed answers in the lawsuit denying all material allegations set out in the petition.

In the event the court should find RAM Energy, Inc. and its related defendants liable for damages in the lawsuit, a former joint venture partner is contractually obligated to pay a portion of any damages assessed against the defendant lessees up to a maximum contribution of approximately $2.8 million.

REPUBLIC COS: No Class Yet in La. Lawsuit Over Insurance Policy---------------------------------------------------------------A class has yet to be certified in statewide putative lawsuit pending in the District Court of the Parish of Orleans, Louisiana against a subsidiary of Republic Companies Group, Inc.

Filed on April 12, 2006, the suit generally alleges that Republic Fire and Casualty Insurance Co. and other unaffiliated insurer defendants breached their policies by failing to pay the face value of policies to insureds that sustained a total loss of their homes and improvements in part as a result of a non-covered loss from Hurricane Katrina.

Thus, plaintiffs seek to recover face value of the policies regardless of the anti-concurrence provisions of the company's policies or the fact the company timely paid covered losses in accordance with the policies' provisions.

The suit seeks declaratory relief and unspecified monetary damages, statutory penalties and attorneys' fees. No class has been certified in this matter.

The case, filed on Aug. 2, 2004, seeks class-action status and alleges defects in motherboards, which the company distributes, and that the company misrepresented and omitted material facts concerning the motherboards.

The plaintiff seeks restitution and disgorgement of all amounts obtained by defendant as a result of alleged misconduct, plus interest, actual damages, punitive damages and attorneys' fees.

SPEAR & JACKSON: Settles Fla. Consolidated Stock Suit for $650T---------------------------------------------------------------Spear & Jackson, Inc. reached a $650,000 settlement for the consolidated securities fraud class action pending against it in the U.S. District Court for the Southern District of Florida, according to the company's Aug. 14, 2006 Form 10-Q filing with the U.S. Securities and Exchange Commission for the period ended June 30, 2006.

Initially, a number of class actions were initiated in the U.S. District Court for the Southern District of Florida by company stockholders against:

-- the company; -- Sherb & Co. LLP; -- the company's former independent auditor; and -- certain of the the the company's directors and officers,

* including Mr. Crowley, the company's former chief executive officer/chairman, and * Mr. Fletcher, the company's former chief financial officer and current acting CEO.

They charge the company and certain of its officers and directors with violations of the Securities Exchange Act of 1934. These various class actions were subsequently consolidated.

Thereafter, the defendants filed certain Motions to Dismiss with regard to the complaint and on Oct. 19, 2005, the U.S. District Court for the Southern District of Florida in the action, "In Re Spear & Jackson Securities Litigation," entered its order regarding these motions.

The order denied the company's motion as well as that of Mr. Crowley, the former CEO of Spear & Jackson. The company is in the process of preparing its answer and defenses to the complaint.

The court granted the Motion to Dismiss on behalf of Mr. Fletcher, the company's interim chief executive officer, and also granted the Motion to Dismiss on behalf of the company's former independent auditor, Sherb & Co., LLP.

The class plaintiff has since filed an appeal regarding the trial court's decision to dismiss the case against Sherb & Co., LLP, which appeal is presently pending. No appeal was filed with respect to the decision to dismiss the case against Mr.Fletcher.

The court denied the motion of Spear & Jackson's Monitor to abate the litigation for a six-month period pending the administration of the U.S. Securities and Exchange Commission's restitution fund.

The court also denied the Plaintiff's Motion for Clarification and established a new cut-off for discovery until Dec. 19, 2005.

The case was initially set on the court's two-week calendar beginning March 6, 2006 but the trial date has since been reset for October 2006.

On July 7, 2006 the U.S. District Court for the Southern District of Florida issued a Memorandum of Understanding, which confirmed that the plaintiffs and defendants in the class action had reached an agreement in principle for the settlement of this litigation, subject to court approval.

The MOU outlines the general terms of the settlement and is to be supplemented by a Stipulation and Agreement of Settlement that is to be issued at a later date.

In settlement of the class action the defendants will pay a sum of $650,000, which is to be deposited by the company into a Qualified Settlement Fund within thirty days of the date of the MOU.

Following the execution of the MOU, the lead plaintiffs will commence discovery procedures to confirm the fairness and reasonableness of the settlement. Plaintiffs retain the right to terminate the settlement if such discovery reveals that it is not fair, reasonable and adequate.

The suit is "In re: Spear & Jackson, Inc. Securities Litigation, Case No. 04-CV-80375," filed in the U.S. District Court Southern District of Florida under Judge Donald M. Middlebrooks.

STAPLES INC: Issues Vouchers as Settlement in Item Pricing Case---------------------------------------------------------------Staples Inc. is handing out vouchers worth $7.50 to the first 1,200 shoppers at its 64 Bay State stores as part of a settlement of a class action claiming it failed to comply with a state regulation requiring it to mark prices on individual items in its stores, the Boston Globe reports.

There is no minimum purchase required with the $7.50 voucher, and other Staples promotions can be used with it, although no change will be provided on purchases less than $7.50. Vouchers cannot be used for gift cards, stamps, business services, or telephone or Internet orders. There is a limit of one voucher per customer, who must be 15 years old or older.

Colman Herman of Dorchester, a consumer activist who pioneered the item-pricing litigation, says the Staples approach of issuing vouchers to consumers is the way to go. The money should go to consumers or to consumer groups.

Staples settled out of court, denying wrongdoing but proposed a novel method for resolving claims that it violated item-pricing regulations in the state of Massachusetts (Class Action Reporter, Jan. 13, 2006).

TIME WARNER: AOL Members Sue in Calif. Over Privacy Violations--------------------------------------------------------------Berman DeValerio Pease Tabacco Burt & Pucillo initiated a lawsuit in the U.S. District Court for the Northern District of California, on behalf of three AOL members, against AOL LLC, the Internet division of Time Warner Inc.

Specifically, the complaint states that on July 31, AOL posted on its publicly accessible website a database containing roughly 20 million Internet search queries entered over a three-month period by approximately 658,000 different AOL members.

Plaintiffs claim the database detailed the date and time the AOL member conducted each search, as well as any Web sites the member clicked on after AOL's search engine returned its results.

No AOL user names were attached to the database, but the complaint says search terms contain personal information, enough to identify the AOL member.

The complaint alleges that although AOL later pulled the database from its Web site, the database had already been downloaded, reposted, and made searchable on other websites.

The complaint also alleges that AOL has neither taken steps to make secure similar information it has collected nor stopped collecting this type of information from its members.

AOL apologized for its disclosure, but the complaint contends AOL has done nothing to remedy the situation.

The lawsuit is the first class action filed in federal court as a result of AOL's July 31 public release of queries made by hundreds of thousands of AOL members without their permission.

The lawsuit seeks damages on behalf of all AOL members in the U.S. whose Internet search query data was disclosed without consent from Jan. 1, 2004 until the present.

There are questions of law or fact common to the class:

-- whether AOL's release of the Member Search Data, to third parties, was a violation of the Electronics Communications Privacy Act, 18 U.S.C. Section 2702;

-- whether AOL has released the Member Search Date or the content of other communications to third parties and the number of times AOL has released this information;

-- whether AOL's release of the Member Search Data to third parties is a violation of California law;

Martin L. Holton, deputy general counsel of litigation at R.J. Reynolds, said in a statement that R.J. Reynolds -- maker of Camel and Kool cigarettes -- also plans to ask for a stay of all proceedings in the case, pending a review by the U.S. Circuit Court of Appeals.

Judge Jack B. Weinstein of the U.S. District Court for the Eastern District of New York certified on Sept. 25 a class that permits Americans who currently smoke, or ever did smoke "light" cigarettes (Class Action Reporter, Sept. 26, 2006).

Defendants maintained that the "light" or "lights" descriptor refer to taste, but plaintiffs argued they were fraudulently intended to convey to the smoker that 'light' cigarettes were not as harmful to health as 'regular' cigarettes.

The suit seeks economic damages, rather than compensation for death or disease caused by smoking, of between $120 billion and $200 billion.

The suit is "Schwab v. Philip Morris Inc. et al., Case No. 1:04-cv-01945-JBW-SMG," filed in the U.S. District Court for the Eastern District of New York under Judge Jack B. Weinstein, with referral to Judge Steven M. Gold.

The decision was issued by U.S. District Judge Jack Weinstein, who refused to apply the recent findings regarding "light" cigarettes by another federal judge in Washington, D.C., in a case brought by the Justice Department against major cigarette companies.

"The company will take immediate steps to begin the process of appealing this decision to the U.S. Circuit Court of Appeals for the Second Circuit, and will seek a stay of all trial court proceedings pending a decision by the appellate court," said William S. Ohlemeyer, Philip Morris USA's vice president and associate general counsel.

"The company believes that the appellate court will find that [Mon]day's certification decision runs counter to the overwhelming weight of federal and state case law regarding class actions in smokers' litigation and must be reversed.

"This case involves smokers who are not seeking to recover for personal injuries, who continue to smoke 'light' cigarettes and who paid no more for Marlboro Lights cigarettes than they would have paid for regular Marlboros," Mr. Ohlemeyer said.

Judge Jack B. Weinstein of the U.S. District Court for the Eastern District of New York certified a class that permits Americans who currently smoke, or ever did smoke "light" cigarettes, to proceed to trial with their claims that the tobacco companies conspired for decades to deceive the public regarding the health risks associated with light cigarettes (Class Action Reporter, Sept. 26, 2006).

Defendants maintained that the "light" or "lights" descriptor refer to taste, but plaintiffs argued they were fraudulently intended to convey to the smoker that 'light' cigarettes were not as harmful to health as 'regular' cigarettes.

The suit seeks economic damages, rather than compensation for death or disease caused by smoking, of between $120 billion and $200 billion.

The suit is "Schwab v. Philip Morris Inc. et al., Case No. 1:04-cv-01945-JBW-SMG," filed in the U.S. District Court for the Eastern District of New York under Judge Jack B. Weinstein, with referral to Judge Steven M. Gold.

TOBACCO LITIGATION: Aussies Could File Light Suit, Lawyer Says--------------------------------------------------------------Michael Hausfeld, an attorney who is behind a major class action in the U.S. against tobacco companies, believes Australians could also sue for damages, the Australian Broadcasting Corp. reports.

Judge Jack B. Weinstein of the U.S. District Court for the Eastern District of New York certified on Sept. 25 a class that permits Americans who currently smoke, or ever did smoke "light" cigarettes, to proceed to trial with their claims that the tobacco companies conspired for decades to deceive the public regarding the health risks associated with light cigarettes (Class Action Reporter, Sept. 26, 2006).

"Many of the documents that we have seen in the U.S. case deal with internal tobacco industry memos from other parts of the world ... in particular Australia," Mr. Hausfeld said.

"Likewise to the U.S. market, they knew the fraud that they were perpetrating on the Australian public and the fact that the public was relying on it."

Defendants maintained that the "light" or "lights" descriptor refer to taste, but plaintiffs argued they were fraudulently intended to convey to the smoker that 'light' cigarettes were not as harmful to health as 'regular' cigarettes.

The suit seeks economic damages, rather than compensation for death or disease caused by smoking, of between $120 billion and $200 billion.

The suit is "Schwab v. Philip Morris Inc. et al., Case No. 1:04-cv-01945-JBW-SMG," filed in the U.S. District Court for the Eastern District of New York under Judge Jack B. Weinstein, with referral to Judge Steven M. Gold.

UNITED STATES: No Trial Set in Lawsuit Against Milberg Weiss------------------------------------------------------------ A status conference was held on Sept. 20 on a case accusing Milberg Weiss Bershad & Schulman LLP and two of its partners of paying several individuals in secret kickbacks to serve as plaintiffs in numerous shareholder lawsuits.

At the case meeting, U.S. Atty. Douglas Axel said prosecutors might bring "additional allegations not within the scope of this indictment."

Defense lawyers argued that that possibility significantly complicated their trial preparation as well as talks over a discovery schedule and trial date, according to Los Angeles Times.

U.S. District Court, Central District of California Judge John Walter did not set a date for the trial, but said he was considering fall of next year. He set a case meeting to take place Nov. 27, when a trial date will likely be set.

"Setting a trial date is frankly unfair," Bill Taylor, an attorney for Milberg Weiss told the court during the conference.

In May, Milberg Weiss and David J. Bershad and Steven G. Schulman were indicted by a federal grand jury for allegedly participating in a scheme in which several individuals were paid millions of dollars in secret kickbacks in exchange for serving as named plaintiffs in more than 150 class actions and shareholder derivative lawsuits. The firm allegedly received well over $200 million in attorneys' fees from these lawsuits over the past 20 years.

Mr. Bershad and Mr. Schulman both pled not guilty to wrongdoing in July (Class Action Reporter, July 20, 2006). Seymour M. Lazar, who is accused of acting as a paid plaintiff in some of the firm's cases, and Paul T. Selzer, who is charged with laundering money on Lazar's behalf, also pleaded not guilty to charges filed against them.

Recently, attorneys for Mr. Lazar asked the court to dismiss the criminal case against him because protracted delays in the suit and his failing health (Class Action Reporter, Sept. 14, 2006).

The indictment charges the firm and the partners of conspiracy with several objects, including obstructing justice, perjury, bribery and fraud. The conspiracy count outlines a scheme in which individuals received secret kickback payments to serve, or cause friends and relatives to serve, as named plaintiffs in lawsuits filed by Milberg Weiss.

The federal probe into allegations against Milberg Weiss, which once dominated class action law in the U.S., accounting for 85% of all such suits filed in California and 60% elsewhere in 2001, came to light in January 2002, when a flurry of subpoenas went out to scores of lawyers and stockbrokers from major firms and plaintiffs who had participated in Milberg Weiss lawsuits.

In August 2005, Federal prosecutors stepped up their criminal investigation of Milberg Weiss. The investigation looked at whether the firm illegally made payments to plaintiffs to lead a series of shareholder suits. Plaintiffs in such suits are not permitted to receive payments beyond those awarded by courts, to avoid conflict between their interests and those of the rest of the class.

The 1995 Private Securities Litigation Reform Act, which was drafted with Milberg Weiss in mind, limits plaintiffs to no more than five class actions in three years.

ZURICH NORTH: PIA Files Amicus Against Broker Compensation Suit--------------------------------------------------------------- The National Association of Professional Insurance Agents filed an amicus curiae brief with the U.S. District Court for the District of New Jersey, in opposition to certain limited aspects of a proposed settlement involving Zurich North America insurers.

In making this filing, PIA National objects to recent multi-state settlements that allegedly:

-- increase discrimination against PIA members in light of the most recent announcements by leading Mega-Brokers that their 2004 settlements have been revised, permitting them to receive certain specific contingency earnings, when settlements referred to in this class action suit could prohibit such payments to all other participants in the industry.

"A key mission of PIA is to defend the integrity of our members and protect their business interests," said PIA Executive Vice President & Chief Executive Officer Len Brevik. "The alleged abuses that led to these settlements were not committed by Main Street insurance agents. Regrettably, this settlement agreement and others like it attempt to create a remedy for alleged wrongdoing and then impose it on those who were not involved in any wrongdoing. As a result, PIA is compelled to address these issues formally through our direct involvement in this class action, on behalf of our members and their business interests."

CEO Brevik added that PIA's filing also addresses the broader issue of efforts by several Attorneys General to use the settlement process to compel support for changing the way American business operates by attempting to make incentive compensation illegal. In the case of the proposed settlement involving Zurich, this includes a provision requiring the company to "support legislation and regulations in the U.S. to abolish Contingent Compensation for insurance products or lines."

"State Attorneys General should not usurp the policymaking authority of state legislatures," CEO Brevik said.

"Specifically, they should not use their law enforcement powers in an effort to bring about a fundamental change in the American system of free enterprise. Performance-based compensation is not a threat to that system, it is the basis of that system. Certain provisions contained in these agreements are grossly unfair to PIA agents, and grossly unfair to carriers by restricting their ability to compensate their producers in a legal and honest manner."

The PIA filing also notes that several of the original settlements reached in 2004 have, in recent weeks, been amended by State Attorneys General to liberalize earlier prohibitions against receiving any contingency earnings, in signed settlements involving Marsh, Aon and Willis, among others -- while not changing aspects of settlements that may adversely impact Main Street agents, who were never accused of any wrongdoing.

"These voluntary settlement agreements, which are not truly voluntary, are being entered into by carriers under threat of legal sanction by various State Attorneys General," said PIA National President-elect Donna Pile. "Provisions in these settlements place the burden of these sanctions squarely on the shoulders of the local Main Street agents, creating an enormous financial strain on our PIA agencies. It is dangerously disconcerting that the Main Street agent force is paying the price for a few wrongdoers from a totally different arena. This is not due process."

As part of the proposed settlement of a class action filed in August 2005, which was prompted by investigations of alleged bid-rigging conducted by several State Attorneys General, professional independent insurance agents would supposedly be required to use a court-mandated Mandatory Disclosure Statement that is inaccurate, violates existing state and common law and is rife with serious and fatal flaws. While pointing out to the court that PIA has no intent to obstruct the consummation of the Zurich Class Settlement, nevertheless "any perceived need for expediting the settlement process cannot justify the serious and fatal flaws" in the mandated disclosure statement.

"PIA tried to participate in the drafting of the Mandatory Disclosure Statement, but was unfairly locked out of those negotiations," said PIA National Vice President/Treasurer-elect Kenneth R. Auerbach, Esq.

"Unfortunately, the carriers involved in this process are in no position to make modifications to these imposed results. So, the system left PIA with no other option to be heard. PIA is compelled to file our comments together with our proposed changes to the disclosure statement directly with the court, as a friend of the court, for its consideration," Mr. Auerbach said.

Settlement Agreement

In March, Zurich Financial Services Group (Zurich) announced that Zurich American Insurance Co. and its subsidiaries (ZAIC) reached settlements with nine state attorneys general and one insurance commissioner relating to their industry-wide investigations into broker compensation and insurance placement practices.

The agreements call for total payments of $171.7 million and require the implementation of new disclosure and compliance regimes. ZAIC did not admit to any violation of U.S. federal or state laws as part of the settlements.

The Multi-State Agreement increases the $100 million settlement fund amount set forth in the MOU to a total of $151.7 million, and requires ZAIC to pay $20 million for state fees and costs.

The National Association of Insurance Commissioners' Broker Activities Task Force (NAIC Task Force) assisted in developing a regulatory settlement agreement with ZAIC that the insurance commissioner from Florida has now executed. The NAIC Task Force supported this settlement as a sound regulatory framework, and had urged all state insurance regulators to consider joining it.

Some of these settlements are dependent on court approvals, as well as various other conditions.

The nine state attorneys general who have executed settlement agreements with ZAIC as part of the Multi-State Agreement are those from California, Florida, Hawaii, Maryland, Massachusetts, Oregon, Pennsylvania, Texas, and West Virginia.

The Multi-State Agreement will work in conjunction with a proposed settlement between ZAIC and plaintiffs in a nationwide class action against commercial insurers and brokers that is pending in the U.S. District Court of the District of New Jersey. In October 2005, ZAIC and lead plaintiffs in the class action entered into the MOU that sets out the principal terms of settlement of that action.

November 16-17, 2006CONFERENCE ON LIFE INSURANCE COMPANY PRODUCTS: CURRENT SECURITIES, TAX, ERISA, AND STATE REGULATORY AND COMPLIANCE ISSUES ALI-ABAWashington, D.C. Contact: 215-243-1614; 800-CLE-NEWS x1614

BROADCOM CORP: Braun Law Group Files Securities Suit in Calif.-------------------------------------------------------------- The Braun Law Group, P.C. filed a class action in the U.S. District Court for the Central District of California on behalf of purchasers of Broadcom Corp.'s securities between July 21, 2005 and July 13, 2006, inclusive of both the days.

On July 14, 2006, Broadcom announced that it would record more than $750 million in added expenses and restate its past earnings related to the illegal backdating of stock options. The undisclosed backdating of options violated generally accepted accounting principles and the revelation of options backdating resulted in a decline in Broadcom's share price.

All motions for appointment as Lead Plaintiff must be filed with the Court by Oct. 12, 2006.

SCOTTISH RE: Roy Jacobs Files Securities Fraud Suit in N.Y.-----------------------------------------------------------Roy Jacobs & Associates commenced a class action for violation of the federal securities laws in the U.S. District Court for the Southern Eastern District of New York on behalf of purchasers of the common stock of Scottish Re Group, LTD. The class period is from Feb. 17, 2005 to July 28, 2006. Defendants include Scottish Re and certain of its top officers and directors.

The complaint alleges that Scottish Re and certain of its officers and directors violated the federal securities laws by making false and misleading statements and omissions concerning Scottish Re's financial health and business prospects, and covered up serious operational and financial problems.

During the class period, the company continued to report robust earnings and announced that this positive momentum would continue going forward.

In early May 2006 the company announced that it had refinanced, at favorable rates, all of its regulatory reserves for the business acquired in its acquisition of ING Re's reinsurance business.

While the company also reported reduced earnings for the first quarter of 2006, this was dismissed as temporary, and not a cause for concern.

Then on July 28, 2006, the defendants shocked the market by announcing that CEO Scott Willkomm had resigned, and that for the second quarter, the U.S. would report a huge loss of $130 million, and that results for the remainder of the year would be negatively affected.

On this news the company's share prices declined an astounding 75%, from $16.00 to $3.99, wiping out millions in shareholder value. Scottish Re's share price has never fully recovered.

All motions for appointment as Lead Plaintiff must be filed with the Court by Oct. 2, 2006.

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